Fitch lowers Guorui Properties

Fitch Ratings said it downgraded Guorui Properties Ltd.'s long-term foreign-currency issuer default rating to B- from B with a stable outlook.

The agency also said it downgraded its senior unsecured rating and the ratings of all its outstanding bonds to B- with recovery rating of RR4 from B with recovery rating of RR4.

Fitch also simultaneously removed the ratings from Rating Watch negative.

The resolution of the negative watch follows Guorui's issuance of $160 million 13½% senior notes due 2022 and the subsequent $295 million tap issuance on the bond, the agency said.

The company is able to use the proceeds to refinance its offshore debt of $519 million that it has to repay in March 2019, Fitch said.

The ratings were downgraded to reflect the debt repayment pressure Guorui still faces, especially when credit conditions tighten, along with a profile is not commensurate with a B rating, the agency said.

This factor will constrain Guorui's rating until management can improve its debt-maturity profile or enhance its cash to mitigate the risk, Fitch said.

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